Hyderabad: Telangana, along with Kerala, spends the lowest percentage of its revenue receipts (RR) among the southern states, allocating just 2.7% for schemes aimed at direct cash transfers. In contrast, all other states, including Andhra Pradesh, spend more than 5% of their revenue receipts on cash transfers, which affects their capacity to invest in critical infrastructure.According to the latest Ecowrap report, based on the budget estimates for 2025-26, Kerala spends less than 1% of its revenue receipts, while Andhra Pradesh spends nearly 5%. Tamil Nadu allocates 4.5%, and Karnataka spends the most at 10.5% of its revenue receipts on cash transfers.As per the report, cash transfers — which include direct benefit schemes such as income support for women and other welfare payouts not linked to a specific sector — have expanded rapidly across states in recent years. These transfers grew at a trend rate of 53.6% between 2018-19 and 2025-26, reaching nearly 1.96 lakh crore. The rise has been aided by the JAM trinity (Jan Dhan accounts, Aadhaar and mobile connectivity), which has made direct transfers easier and more efficient.The data shows that Jharkhand, Karnataka and West Bengal are the leading states in terms of cash transfers as a share of revenue receipts/GSDP. Karnataka’s cash transfers surged nearly 94 times over six years, while Jharkhand and West Bengal recorded 47-fold and 24-fold increases, respectively. An important inference from the data is that many states with aggressive welfare-oriented cash transfer programmes are also among the states with high utilisation of SASCI (Special Assistance to States for Capital Investment) funds from the Centre. The report suggests that some states may be substituting their own capital expenditure with central assistance. In other words, instead of increasing fresh investment from their own budgets, states may be using Centre-funded capital support while allocating more of their own resources toward welfare transfers.
